Homehttps://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/Businesshttps://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/The CEO of Bank of America has one simple reason why he doesn't see a recession

The CEO of Bank of America has one simple reason why he doesn't see a recession

Executive Director of Bank of America Corp. Brian Meinichan says he sees no recession in trouble because the US consumer remains healthy.

"But what will become of this is a minor US consumer. And the main consumer is doing well and earning more money, they are hired; and more importantly, they spend more money. "

Brian Meinichan, CEO of Bank of America

The Wall Street leader's comments broadcast on CNBC on Wednesday came after investors were worried about the health of the US economy as the Trump administration was locked in a battle of the year with China over trade policy.

The dispute over import duties has raised the chances that a recession may soon curb the domestic economy, raising anxiety in the financial markets. However, Moynihan said that the inversion of the yield curve that emerged last Wednesday between closely watched yields on shorter and longer-term government bonds does not necessarily mean a recession is coming.

2-year US Treasury yield

TMUBMUSD02Y, + 4,59%

traded for a short period over 10 years at the cash register

TMUBMUSD10Y, + 2.34%

for the first time in more than a decade (and this happened briefly on Wednesday), a condition preceding the last seven recessions.

"See, when the yield curve was moving around the drones, it felt like, 'Well, that means a recession is coming,'" Monihan told CNBC.

However, the head of the bank said that this time the recessionary gauge could be influenced by the global market, which swirled around $ 15 trillion in negative interest rates.

See : After the yield curve reverses – here's how the stock market trend has been developing since 1978.

"But if you really think about it, there can be two reasons for the yield curve it's about moving around and seeing that debate take hold, "he said.

"Which is partly the flight to quality. 80-90% of the world's total production is available in the United States. So the money comes here because you give your money to someone – a thousand dollars – and it will pay you back in less than 10 years? Or will you give your money to someone – a thousand dollars – and they will pay you back in 10 years? And so there is a lot of debate about this, "said Bank of America CEO.

Moynihan said that the debate about the trajectory of the US economy is down to consumers.

" And so in our customer base through this time August 15 to date, you've seen the amount spent by US customers at Bank of America: $ 2 trillion, "he said."

"That's 5.9% year-over-year over the same period. So in [2017-18] you're up about 8.5% and 5.9% in 2018-19, so think of it as $ 120 billion more than your cost our consumers this year compared to last year, which means that US consumers continue to spend and this will keep the US economy in good shape, "Moynihan explained.

According to the Bureau of Economic Analysis, consumer spending represents 68% of US economic activity.

Monihan's sanguine view of the consumer also comes as the industrial average of Dow Jones

DJIA, + 0.93% ,

the S&P 500 index

SPX, + 0.82%

and Nasdaq Composite

COMP, + 0.90%

enjoyed rapid profits on Wednesday, at least in part amid high profits from Target Corp. retailers.